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Can Anyone Make A 'Netflix for Baby Clothes' Work?

Collaborative consumption business models meet their test in the hyper-competitive baby clothing sector.

Sharing isn’t a simple way to earn a living, and barter is a tricky business, but one cute little market—baby clothes—turns out to to be a tough proving ground for collaborative consumption business models. Now a new company, GoodKarma, is entering the tot market with high hopes.


On its face, it makes economic sense for moms to swap, share and reuse kids’ clothes. Babies outgrow outfits faster than they can ruin them, leaving parents with perfectly good, or at least good enough, animal pajamas and spaceship sweatshirts in need of a new home. Babies go through seven sizes by the time they’re two years old. It costs an estimated $27,000 to outfit the average American before they stop growing around 17 years of age, so there’s certainly money to be made helping families cut clothing costs.

GoodKarma is a subscription service to help parents do just that by sharing used clothes. Starting at around $30 a month, moms can get seven outfits for their quick-growing offspring. They keep them until the kiddie hits a growth spurt or the season changes and it’s time for a new outfit. Then they pack up the whole bunch, new stains and all, and stuff them back in a prepaid mailer to founder Sharon Schneider. Wash, rinse, repeat—literally.

But building this kind of business isn’t as easy as it appears. Last summer, Plum Baby Gear billed itself as a "Netflix for baby clothes" and garnered a waiting list for customers, but by last month, Plum's founders had shut down after determining they couldn't scale up profitably. Parents wanted too many style options, and sent the clothes back for replacement too often for costs and inventory to stay low.

Compare that kind of burden on a sharing subscription company to the old faithful of collaborative consumption in the baby clothes-sharing sector, thredUP, which uses a swapping model and doesn't need to touch the clothes itself. ThredUP signs up hundreds of new moms a week and has facilitated more than two million items traded, according to company figures. Parents buy a box stuffed with clothes for $9 plus shipping straight from another parent. ThredUP keeps the a chunk of $9 kicking back up to $5 to the sender depending on quality ratings from the receiver—it was originally a $5 fee all to thredUP. If customers want the right to get more than a set amount of clothes, they need to give some up for $9 or get locked out of the loop.

The secret to a swapping site is liquidity, thredUP founder James Reinhart told me on the occasion of his millionth item swapped last June. Success means a large scale and careful management customers to ensure the right proportion of givers and getters.

Fast as thredUP's growth is though, many parents don't like to find the clothes too much like hand-me-downs, even if the price comes out to as little as $1 a piece; in response, thredUP has recently launched a "concierge" service that lets customers send in clothes to the company to sell by the piece, for cash or credits used for swapping by the box.

Plum Baby Gear attempted to attract the kind of customer who wanted a little more choice than thredUP offered, but it failed in part because its rental customers were more interested in shopping for discounted clothing than swapping hand-me-downs. GoodKarma aims to hit that sweet spot. Schneider remains optimistic her company will avoid Plum’s fate, especially after winning the Common Pitch NY competition earlier this month.

Why might her company work in a sector where swapping has succeeded and Plum's subscription model failed? Plum offered new clothes and let subscribers choose styles from a limited pool of options, putting stress on the company, while GoodKarma takes the opposite tack, buying used clothes in bulk and letting parents say what they don’t want—clothes with “daddy” on them aren’t a hot choice for single moms, for instance.

“You can tell us my daughter is a girly girl, or no monkeys, and GoodKarma will send you clothes that fit your requests,” Schneider says. There’s a notes section and she reads each one. “We’re small enough that I still call almost every subscriber and say, did you like it?”

That doesn’t bode well for scale. For now, the company has just a few dozen customers since launching in December with a Groupon offer to Milwaukee residents. Getting the space ship sweatshirts to the future scientists will be the hardest problem, but some sorting will earn Schneider extra income—clothes are divided by brand into three categories, “basic,” “better,” and “boutique” with prices scaling accordingly.

That’s why Schneider expects to draw a premium over the lower cost peer-to-peer barter option, while still remaining cheaper and less wasteful for a consumer than purchases straight from Macy’s or even Wal-Mart. Waste reduction, after all, is a major motivation for the kind of customers who patronize a collaborative consumption business.

GoodKarma is also trying to be as socially responsible as possible. Their bulk clothing buys come from school fundraisers and clothing drives. Families get a tax deduction for donating to the school, and then GoodKarma pays the school for the clothing.

If they grow in size, a fundraiser like could earn a couple thousand dollars for a school: A basic baby tee would fetch $1, and a designer brand could get up to $15 per piece. That’s better than a bake sale.

Image courtesy of GoodKarma.co

Articles

The healthcare systems in the United States and the United Kingdom couldn't be more different.

The UK's National Health Service is the largest government-run healthcare system in the world and the US's is largest private sector system.

Almost all essential health services in the UK are free, whereas in America cost can vary wildly based on insurance, co pays and what the hospitals and physicians choose to charge.

A medical bill in the US

One of the largest differences is cost. The average person in the UK spends £2,989 ($3915) per year on healthcare (most of which is collected through taxes), whereas the average American spends around $10,739 a year.

So Americans should obviously be getting better care, right? Well, the average life expectancy in the UK is higher and infant mortality rate is lower than that in the US.

RELATED: The World Health Organization declares war on the out of control price of insulin

Plus, in the U.S., only 84% of people are covered by private insurance, Medicare or Medicaid. Sixteen percent of the population are forced to pay out of pocket.

In the UK, everyone is covered unless they are visiting the country or an undocumented resident.

Prescription drugs can cost Americans an arm and a leg, but in the UK, prescriptions or either free or capped at £8.60 ($11.27).

via Wikimedia Commons

The one drawback to the NHS system is responsiveness. In the UK people tend to wait longer for inessential surgeries, doctor's appointments, and in emergency rooms. Whereas, the US is ranked as the most responsive country in the world.

RELATED: Alarmingly high insulin prices are forcing Americans to flock to Canada to buy the drug

The New York Times printed a fair evaluation of the UK's system:

The service is known for its simplicity: It is free at the point of use to anyone who needs it. Paperwork is minimal, and most patients never see a bill. … No one needs to delay medical treatment until he or she can afford it, and virtually everyone is covered. …

According to data from the Organization for Economic Cooperation and Development, the United States spent 17.2 percent of its economic output on health care in 2016, compared with 9.7 percent in Britain. Yet Britain has a higher life expectancy at birth and lower infant mortality.

Citizens in each country have an interesting perspective on each other's healthcare systems. UK citizens think it's inhumane for Americans have to pay through the nose when they're sick or injured. While Americans are skeptical of socialist medicine.

A reporter from Politics Joe hit the streets of London and asked everyday people what they think Americans pay for healthcare and they were completely shocked.

Health

Bans on plastic bags and straws can only go so far. Using disposable products, like grabbing a plastic fork when you're on the go, can be incredibly convenient. But these items also contribute to our growing plastic problem.

Fortunately, you can cut down on the amount of waste you produce by cutting down on disposable products. And even more fortunately, there are sustainable (and cute) replacements that won't damage the environment.

Coconut bowls


Cocostation

Who says sustainable can't also be stylish? These cute coconut bowls were handmade using reclaimed coconuts, making each piece one of a kind. Not only are they organic and biodegradable, but they're also durable, in case your dinner parties tend to get out of hand. The matching ebony wood spoons were polished with the same coconut oil as the bowls.

Cocostation Set of 2 Vietnamese Coconut Bowls and Spoons, $14.99; at Amazon

Solar powered phone charger

Dizaul

Why spend time looking around for an outlet when you can just harness the power of the sun? This solar powered phone charger will make sure your phone never dies as long as you can bask in the sun's rays. As an added bonus, this charger was made using eco-friendly silicone rubber. It's win-win all around.

Dizaul Solar Charger, 5000mAh Portable Solar Power Bank, $19.95; at Amazon, $19.95; at Amazon

Herb garden kit

Planter Pro

Put some green in your life with this herb planter. The kit comes with everything you need to get a garden growing, including a moisture meter that helps you determine if your herbs are getting the right amount of food to flourish. All the seeds included are certified to be non-GMO and non-hybrids, meaning you can have fresh, organic herbs right at your fingertips.

Planter Pro's Herb Garden Cedar Planter, $39.00; at Amazonedar Planter, $39.00; at Amazon

Reusable Keurig cups

K & J

Keurig cups are convenient, but they also create a ton of plastic waste. These Keurig-compatible plastic cups are an easy way to cut down on the amount of trash you create without cutting down on your caffeine. Additionally, you won't have to keep on buying K Cups, which means you'll be saving money and the environment.

K&J Reusable Filter Cups, $8.95 for a set of 4,; at Amazon

Low-flow shower head

Speakman

Low-flow water fixtures can cut down your water consumption, which saves you money while also saving one of the Earth's resources. This shower head was designed with a lighter flow in mind, which means you'll be able to cut down on water usage without feeling like you're cutting down on your shower.

Speakman Low Flow Shower Head, $14.58; at Amazon

Bamboo safety razor

Zomchi

Instead of throwing away a disposable razor every time you shave, invest in an eco-friendly, reusable one. This unisex shaver isn't just sustainable, it's also sharp-looking, which means it would make a great gift for the holidays.

Zomchi Safety Razor, $16.99; at Amazon

The Planet
Instagram / Leonardo DiCaprio

This August, the world watched as the Amazon burned. There were 30,901 individual fires that lapped at the largest rainforest in the world. While fires can occur in the dry season due to natural factors, like lightning strikes, it is believed that the widespread fires were started by loggers and farmers to clear land. Brazil's president, Jair Bolsonaro, cites a different cause: the actor Leonardo DiCaprio.

DiCaprio wasn't accused of hanging out in the rainforest with a box of matches, however President Bolsonaro did accuse the actor of funding nonprofit organizations that allegedly set fires to raise donations.

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The Planet